I think you have a good summary of the earnings call right there.
EPYC revenue is not yet epic — it seems rather lethargic. While snowballing may have begun, it started from such a low base that there is no size and weight to the ball so far. But the potential is there. AMD confirmed that they are on target for 10% unit share in server by the middle of this year. Lisa Su has stated that revenue share should be similar, but let's account for some discount and the fact that Intel plays in a larger part of the market still. So consider 7% revenue share of Intel's current $7B+ for Q4. That is ~$0.5B. Still far below the contribution from the client side of the business, but it is starting to become material.
Of course, with AMD having superior technology, no one here is content with just 1 of 10 CPU's sold in the server market being an AMD processor. Over time we would like to see AMD becoming the preferred product, with the share to reflect that. That means approaching and surpassing 50% share over time. Becoming the leader in high performance compute — that is what Lisa Su is heading for.
The road from 10% to 20% can be very quick, if history is any guide. Back in April 2006, the Opteron processor marked its third anniversary with 22% share. Ruiz had predicted that Opteron would exit 2004 with 10%, over one and a half years after launch, which didn't happen, and he set a new target for 12% by the end of 2005. They reached 11% in 2005-Q2 already. It then doubled from there in a year.
quarterlyearnings.amd.com
theregister.co.uk
Other than that, my take away from the quarter is amazement by the scale of success of 7nm Ryzen and its contribution to revenue. We often point out, as I see elsewhere as well, that the DIY/channel market is "tiny". And it is often pointed out that the cake is in server. Well, it is not. Not by a long shot. So far at least. There is tremendous growth potential in the client market, especially with traction with the OEMs in the commercial and notebook segments.
I look forward to the Financial Analyst Day (March 5). To underpin the high valuation, we need a FAD to dispel the FUD.
PS. Therese Poletti has a good article on the quarter, expressing the same frustration as yours over the lack of transparency in the reporting of the server side of the business.
marketwatch.com |
